Aer Lingus has accused arch-rival Ryanair of deterring the likes of British Airways from taking a stake in the business because of Ryanair's "poison-pill" shareholding in Ireland's national airline.

The airline's new chief executive, Christoph Mueller, said bosses of European carriers had cited Ryanair's 29% ownership of the business as an obstacle to any deal. Potential investment partners in the loss-making airline include British Airways and US operator United Airlines, with whom it has strategic alliances.

"A minority shareholding from an alliance partner is restricted by Ryanair. The shareholding works as a poison pill," he said. Mueller added that he had met Ryan­air's outspoken chief executive, Michael O'Leary, at an industry gathering but had yet to have a one-to-one encounter with his largest shareholder. Citing the example of Germany's Lufthansa, which has invested in Brussels Airlines and Austrian Airlines, Mueller said a corporate tie-up with another airline was impossible while Ryanair stays on the share register. Aer Lingus is not a member of the three major global airline alliances – Oneworld, Star Alliance or SkyTeam – but Mueller admitted that, in the long term, joining one of the major groups is inevitable.

"The fact that Ryanair is a shareholder is a limiting factor in attracting other airline shareholders in the framework of a global alliance," he added. Aer Lingus is 25% owned by the Irish government with its employees owning a further 14%. Mueller dismissed industry speculation, fuelled by incessant criticism from Ryanair, that Aer Lingus could run out of cash in the near future. He said Aer Lingus has access to about €770m(£672m) and is slowing its cash burn rate of €400m a year.

The Aer Lingus chief added that the carrier is pulling back from the low-cost airline business model first introduced by Willie Walsh, now BA chief executive, and will increase average fares.

"We will not try to stimulate the market like hell where there is no demand left," Mueller said.